March 18, 2013 By Paul Arnold
Crowdsourcing gathers new ideas and information from large groups of people via the Internet. It is often defined as tapping the collective intelligence of the public to perform business-related tasks that a company would otherwise do itself or outsource to a third party.
Crowdsourcing is based on the belief that more people working together are smarter than one individual. The term is an aggregation of two words ‘crowd’ and ‘outsourcing’. Although it was first coined in a Wired magazine article in 2006, the concept itself is not new. The idea of reaching out to the crowd for their ideas, knowledge, experience, and expertise has been around for centuries. There a number of notable examples of crowdsourcing from history:
In 1858 when the Oxford English Dictionary was being compiled scholars put out an open call for volunteers to write about different topics according to their expertise.
Prized-based competitions are also a form of crowdsourcing. In 1714 the British government sponsored a contest for a device that could establish the longitude of ships at sea. Carpenter and clockmaker John Harrison was awarded a huge cash prize for his invention of the marine chronometer.
In 1795 Napoleon launched a competition for someone to invent a way of preserving food for his army. It was won by confectioner Nicholas Appert who invented airtight food preservation and he was awarded 12,000 francs.
What is new with crowdsourcing is how the Internet connects lots of people from all over the world very quickly and how their work can be directed and organised.
Types of Crowdsourcing
Crowdsourcing can be used in a number of different ways:
To this list we can also add crowdfunding. This is the financing of projects or people by large numbers of individuals who believe in the venture. Each person makes a small donation that adds up to a lot.
Among the most popular crowdfunding websites are Kickstarter, RocketHub, and indiegogo. According to an article posted on the Forbes website in December 2012, crowdfunding is becoming a generally accepted tool for companies to raise funds. It goes onto say the real explosion in its popularity will come in 2014 when corporate America officially embraces crowdfunding.
What are the Benefits of Crowdsourcing?
Who Can Use Crowdsourcing?
Companies of all shapes, sizes and business genres, individuals, non-profit organisations and government groups can profit by engaging with crowdsourcing. Among the big adopters of crowdsourcing practices are Procter and Gamble, IBM, Dell, Lego, Starbucks, Coca-Cola, and Nokia. Crowdsourcing has helped these firms develop new products at lower cost, brainstorm new ideas and emerging trends, solve technical problems, design logos and packaging, gather feedback and business ideas, and design advertising campaigns.
How to Crowdsource
A well thought out and carefully executed crowdsourcing project can yield high results. Although elegant and simple in concept, crowdsourcing can be difficult to do well. Of utmost important is to frame the crowdsourcing task in such a way that it delivers the required results. Poorly framed challenges result in weak and shallow solutions.
Managing a crowdsourcing initiative involves capabilities and a range of skills that many companies just don’t possess. They can try to develop these skills internally or engage open innovation marketplaces to manage the collaborative approach effectively.